The nation’s high level of unemployment has become a growing concern within the mortgage industry and is now one of the primary triggers of default among struggling homeowners.

To help counter the effects of the still-deteriorating job market on the housing industry, the Dodd-Frank Reform Act provided $1 billion to HUD to implement the Emergency Homeowners Loan Program.

The program will offer a declining balance, deferred payment “bridge loan” of up to $50,000 to assist eligible homeowners with payments of past due mortgage expenses, including delinquent taxes and insurance, plus up to 24 months of monthly mortgage payments, mortgage insurance premiums, taxes, and hazard insurance.

The initiative will provide assistance to homeowners in Puerto Rico and the 32 states not targeted by the Treasury’s Hardest Hit Fund program, which earmarked over $2.5 billion to implement mortgage assistance programs in states where local unemployment rates are above the national average.

“It is HUD’s intention for the program to begin taking applications from eligible homeowners by the end of the year,” according to a statement from the federal agency.

HUD expects to begin taking applications from borrowers for assistance by the end of the year.

“The Emergency Homeowner Loan Program will provide limited and targeted assistance to help working families

get back on their feet and keep their home while they look for work,” according to a statement from HUD.

The federal agency explained, “In crafting this new loan program, HUD built on the lessons learned from Treasury’s Hardest Hit initiative to design and implement a program to assist struggling unemployed homeowners avoid preventable foreclosures. Together these two initiatives represent a combined $8.6 billion investment to help struggling borrowers.”

To be eligible, the homeowner must be at least three months delinquent in their mortgage payments and have a “reasonable likelihood of being able to resume repayment” of their mortgage payments and related housing expenses within two years.

The property must be the principle residence of the borrower, and eligible borrowers may not own a second home. Borrowers must have suffered at least a 15 percent reduction in income and have been able to afford their mortgage payments prior to the event that triggered the income loss.

HUD will delegate key program administration functions to NeighborWorks America. Nonprofit housing counselors who are part of NeighborWorks’ National Foreclosure Mitigation Counseling Program will coordinate intake counseling, document preparation, and outreach functions.

HUD says it also plans to use its delegation authority to contract with “an experienced entity” to provide loan servicing and fiscal control functions, such as collecting payments from homeowners, distributing payments to servicers, and managing loan balances.

State housing finance agencies operate loan assistance programs determined by HUD to be similar to the agency’s new program will receive allocations to fund emergency loans for borrowers in their states, as well as payments to cover the administrative costs of performing the intake, housing counseling. and fiscal agent functions.

A list of the states to receive assistance through the program and the amount of funding allocated to each can be found on HUD’s program summary document.